The facility in Xingping, Shaanxi province, which went into service in January, was developed by the academy's Dalian Institute of Chemical Physics and the State-owned Shaanxi Yanchang Petroleum Group.

The project could yield more than 100,000 metric tons of pure ethanol a year, according to Liu Zhongmin, deputy director of the institute.

China produces 7 million tons of ethanol a year, "but that doesn't satisfy the country's industrial and energy needs", he said, adding there are plans to open another coal-to-ethanol production line making 1 million tons a year by 2020.

"Most countries produce ethanol using foods like corn or sugar cane, but this is not a viable option for China because of its massive population," Liu said. "By turning our abundant coal resources into ethanol, the technology will help safeguard energy and food security."

Moreover, ethanol is versatile and produces only water and carbon dioxide when burned, he said, adding, "Utilizing it could reduce our dependency on fossil fuels and make our industrial production and energy structure more environmentally friendly."

Zhu Fang, deputy director of information and marketing for the China Petroleum Chemical Industry Federation, has raised doubts about whether ethanol can help reshape the nation's energy structure.

For ethanol to make an impact, it must be widely used in vehicle fuels, Zhu told China Coal Chemical Industry Magazine last year. However, oil prices have dropped so much that ethanol fuel is no longer cost-effective compared with crude oil.

Zhu Wenliang, a researcher at the Dalian institute, said while ethanol fuel's cost advantage has dropped, it is still profitable. "Oil prices can fluctuate, but the cost of making ethanol with our new technology is manageable, making the ethanol fuel market less volatile," he said.

Fount: http://www.chinadaily.com.cn/china/2017-03/20/content_28607707.htm